11/05/2007 @ 6:12PM

Mixed Rainbow For Radiohead

Radiohead generated a firestorm of publicity when it announced last month that it was making its new album, In Rainbows, available for download at whatever price fans were willing to pay.

That raised an obvious question  how many fans would still opt to pay to get the album? comScore offered a preliminary answer Monday.

In a study that examined traffic to Radiohead’s In Rainbows Web site during the first 29 days of October, 38% of those who downloaded the album at the site paid something to get the album, while 62% paid nothing.

Of those who paid, 17% paid $4 or less, 6% paid between $4.01 and $8, 12% paid between $8.01 and $12, and 4% paid more than $12. Put another way, those who paid more than $8 accounted for about 79% of the revenue generated from the site.

It’s worth noting that the figures only accounted for visitors to the In Rainbows Web site. Not included are the hundreds of thousands of unauthorized free downloads of the album that have been recorded at file-sharing networks. (See: Free? Steal It Anyway)

The numbers also exclude purchases of the album on CD and vinyl LP, which have been available as part of a deluxe package for 40 pounds (about $83).

So, what do the comScore numbers say about the success of Radiohead’s In Rainbows download experiment? Opinion was split among the industry experts polled by comScore.

Jim Larrison, general manager of corporate development at online advertising firm Adify, said he was impressed by the number of paid downloads.

“This is a true win for the music industry as it shows there is still perceived value in the digital form of entertainment,” he said. “Of course, it does suggest that the marketplace is continuing to migrate and the music industry needs to shift with consumer behavior.”

But Fred Wilson, a managing partner at New York venture capital firm Union Square Ventures, said he was disappointed by the number of fans who had opted to pay nothing.

“This shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for,” Wilson said. “That’s a large group that can’t be ignored and its time to come up with new business models to serve the freeloader market.”

In the meantime, more traditional means of music retailing will remain important for Radiohead. The band has already signed a deal with Britain’s XL Recordings to sell the new album on CD outside of the U.S.

And on Monday, Radiohead’s former label EMI, which retains the rights to the band’s earlier work, announced the planned release of a CD box in December priced at 40 pounds ($83) that includes all of the band’s previous albums. EMI is also making the band’s entire back catalog available as a downloadable package of MP3 files for 35 pounds ($73) and on a collectible four-gigabyte memory stick for  gulp!  80 pounds ($166).